The Bank of Nova Scotia, a major holder of KeyCorp (KEY), recently bought 50,000 shares. The buy increased the bank’s stake by less than 1%, and came to a total cost of $892,500.
This marks the first insider buy since August 2023, when a company director bought 10,000 for just under $115,000, representing a new stake in the company. Otherwise, there have been some moderate insider sales, mostly following the exercise of stock options.
Overall, KeyCorp insiders own 0.3% of shares, and institutions like the Bank of Nova Scotia own another 94.7% of shares.
The regional bank is up 26% over the past year, slightly edging out the 20% gain in the S&P 500.
Despite that rally, the bank has fared poorly operationally. Revenues are off by 60%, as high interest rates have kept potential borrowers on the sidelines.
Thanks to declining lending activity, the bank managed to eke out just a 3% profit margin.
Action to take: Momentum investors may like shares here, as the stock has been trending higher over the past year, but is reasonably off recent highs. Shares trade at less than 12 times earnings, which makes the stock a value play here, so long as those earnings materialize.
Plus, at current prices, KeyCorp also pays a 4.5% dividend.
For traders, the March $18 calls, last trading for about $0.40, could see mid-double-digit returns on a trend higher in shares over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.